I read your interview on “ANC Thugs” published in Biznews recently, with a mixture of shock and a tinge of amusement. It was shocking but not altogether surprising that you have been wheeled out of the wilderness for what is supposedly a genuine interview when it is all part of the campaign by the media cabal of Alec Hogg, Peter Bruce and company, to attack the ANC government.
It is amusing how your old (white) boy’s club in the media continues to portray you as some paragon of virtue – a man whose business skills, corporate governance and ethics, and morality everyone should strive to reproduce.
You and I know that your chequered history contradicts this portrayal of a man who is a business guru, an epitome of ethics, and a corporate governance holy man.
It’s astounding that you are being hailed in the areas which you have been a dismal failure. What this does of course is to offer those of us whose memory, unlike that of your acolytes sitting in their ivory towers, the opportunity to expose you.
Before I delve into the content of your interview with Biznews, let me deal first with your character and questionable morality.
Surely you and your boys club cannot forget Lisa Steyn, the woman whose bum you spanked at a press conference full of men for…. wait for it… arriving late. In anybody’s language Russell, this is sexual harassment which is an offence in any corporation that is not run by you and men who feel entitled to do as they please to a woman’s body. You escaped the punishment meted-out to sex-pests because you happen to have carved this holier-than-thou image. Instead of charges being pressed against you and the media haranguing you as they would have done anyone who had displayed such misconduct, you got away with a feeble statement from your spin-doctor that you “meant no harm”.
It is common knowledge that you left your last position under a dark cloud following the dodgy IT contract that left the JSE reeling with a debt of R300 million. You got away with a slap on the wrist again – you and your team were denied bonuses.
How about that dubious research about Black ownership accounting for 32% of South Africa’s available listed shares when in fact it was below 2% as pointed out at the time by Duma Gqubule and Empowerdex?
The continued characterisation of yourself as a business pundit, by both yourself and some media houses, is the greatest work of fiction to emerge from the South African business environment. As far as I am concerned, you are a typical case study of what can be called the ‘corporate birds of passage’. Other than your roles in management in companies started by others, you have been a typical corporate vulture; flying from one entity to another, masquerading as some guru on company boards, offering pseudo-knowledge of business – while in fact scavenging for financial honoraria for attending meetings. You have no history of having started any business of your own or having run one successfully. You have always been an employee Russel.
Even your record in the financial services sector speaks volumes. According to reports including at least one work of business literature – There’s a Tsotsi in my Boardroom – you took a solid bank, messed it up, and got a handshake of R36 million for it. It is by your own admission (in the article) that even the government refuses to take your advice. Can we then wonder why?
Let’s analyse some of the extracts from the interview. In your own words you claim to have advised the SAA and the government thus:
“Guys, we are trading in insolvent circumstances. We need Department of Public Enterprises (DPE) to speak to National Treasury, to at least get a guarantee. Although a guarantee doesn’t really solve the issue. All it allows you to do is to borrow money that you can’t afford to service. You either capitalise SAA properly or let’s close the thing down.”
What contradictions littered in that paragraph alone! First you give advice. ”Let’s get a guarantee”. And then you contradict yourself. “It (the guarantee) doesn’t really solve” the problem. Then you discredit yourself. “All the guarantee allows you to do is to borrow money that you can’t afford to service.” Then in the same conversation you come up with a completely new idea. “You either capitalise SAA properly or let’s close the thing down”. So which is it really Mr Business Pundit? With advice like that, who needs business liquidators?
In the article you go on and say: “It was also during Malusi Gigaba’s term as the Minister of DPE that he came out very strongly with this concept: State-owned enterprises will be used to achieve state objectives. Now, we know what that implies. That implies ‘get hold of the procurement budgets of state-owned enterprises in order to achieve state objectives’ and we know what that implies.”
Look Russell, if you have been exposed to economic theory at least at first year university level, you would know that there is a concept called market failure. That is precisely why the government bought SAA in the first place. Let me explain the concept of market failure in its simplest form to help you understand. Market failure occurs when the private sector is unable to invest in a particular sector or industry or project due to, among others, the risk of whatever form the private sector cannot carry. In such an instance, the state in various forms would then invest in such a sector or industry, because it’s strategic to do so. Such an investment is done on the basis of meeting strategic state objectives. Therefore, a state entity can never exist other than to meet state objectives. It’s therefore foolhardy of you Mr Loubser to question the use of state assets to meet state objectives.
In the democratic order, it has always been the government’s objective to build an inclusive economy using various instruments such as legislation. These would for instance include the various empowerment laws, the National Development Plan and the procurement of goods and services by the state and its entities, to mention but a few. Notwithstanding these noble objectives, the pre- 1994 business and political elite like you that benefited from apartheid, continue to resist change. It is your ilk that hounded out meaningful empowerment of black companies at SAA. Through your eyes, black people do not deserve participation in the economy through meaningful procurement by government. They only deserve to be given crumbs. You are happy when the state dishes out tenders for cleaning, gardening, security and corporate gifts. You cannot countenance black companies being government fund managers or transaction advisors. In your mind, you probably ask the question: Who do these blacks think they are to deserve millions?
To me your very response to the interviewer’s first question reveals a man who has given up in being involved meaningfully in the real business of business. You are hiding behind the boardroom table of the FirstRand Group. Otherwise how do you explain the statement: “I’m very happy to be involved from a non-executive point of view with the FirstRand Group because it’s a management that I can trust absolutely. Their ethics are unquestionable and I can also understand the business because that’s my background – because banking has become (and can be very, very technical, complicated, and complex) – so every third month, I’m very busy. In between, I’m less busy, which is fantastic so, I’m still involved.”
If FirstRand’s management have the attributes you describe, then they don’t need you. You are the opposite of what you describe. You say you trust their management. And yet as a manager, you were not trustworthy. You harassed women. You lacked requisite skills. You failed to implement what you were trained to do in the context of business. By your own admission banking has become “very, very technical, complicated, and complex” – hence you messed up a bank when you were given a chance. You could not even fix the JSE’s IT system. You bought software for R300 million and it did not work.
But your view of FirstRand being ethical must be challenged. This is the same institution which took over Saambou Bank when it collapsed and kept its discriminatory accounting practices which robbed clients of hundreds of millions in interest. It is only when forensic auditors exposed these illegal practices that FNB agreed to pay-out some clients – way short of what they were meant to get. Today this same FNB has been hauled before the Western Cape Equality Court for cheating its Black customers in the low-cost housing market of interest rate benefits. In simple terms, when interest rates went down, FNB would not cut the interest rates on the mortgage loans of the low-cost housing clients it got from the acquisition from Saambou. Having outlined your warped thinking above, you obviously find nothing wrong in the FirstRand’s conduct in this regard hence you can describe that financial institution as ethical.
Having failed to navigate business complexities, you can be forgiven for not understanding the political economy. A simple matter of objectives behind ministerial appointments seems to intellectually elude you. You do not understand that ministers and presidents are appointed on the basis of being politicians. There is therefore no particular qualification other than personal attributes and history. Technocrats in government departments are the ones that are responsible for government operations. Ministers are political heads responsible for policy and oversight. History bears testimony to this. The last shining star of the Nationalist Party finance ministry was Barend du Plessis – a school teacher. The Hans Strydom minister of finance was Dr TE Donges – a former journalist with a law degree. In the democratic government Trevor Manuel was an engineering technician. Pravin Gordhan was a pharmacist. All of them had no financial background nor did they need it to perform their duties. Only Nhlanhla Nene had a financial background in terms of experience and qualifications. So your views on who should be ministers and who should not are irrelevant.
In summing up Mr Loubser, you are not who you think you are and would have us believe. While entitled to your views of others, you have no right to grandstand because you have no ethical and moral right. Yours is a typical case of the kettle calling the pot black. Quick words of advice though, please go and retire into the sunset.